PNX Metals : Excellent Zinc & Precious Metals Results Continue – Hayes Creek, Iron Blow

ASX Announcement

23 January 2017

Level 1, 135 Fullarton Road

Rose Park, SA 5067 Australia

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Excellent Zinc & Precious Metal results continue from the Hayes Creek Project - Iron Blow

Highlights

• Excellent assay results continue at Iron Blow, significant intersections include:

  o 33.6m @ 12.1% Zn Eq (6.28% Zn, 2.34g/t Au, 246g/t Ag, 1.45% Pb, 0.25% Cu) from 180.0m in IBDH041, including;

   11.13m @ 32.8% Zn Eq (17.54% Zn, 6.10g/t Au, 668g/t Ag, 3.57% Pb, 0.69% Cu)

  from 180.9m, and;

  o 44.56m @ 7.2% Zn Eq (4.30% Zn, 2.07g/t Au, 81g/t Ag, 0.43% Pb, 0.35% Cu) from 219.3m in IBDH041

  o 11m @ 7.4% Zn Eq (0.60% Zn, 0.63g/t Au, 332g/t Ag, 1.31% Pb, 0.14% Cu) from 24.0m in IBRC052

• Near-surface extension of western lode identified - outside of existing geological model
• Remaining assays due shortly with a resource upgrade expected in March 2017

PNX Metals Limited (ASX: PNX) is pleased to advise that it has received assays from a further 10 holes drilled as part of a 30 hole infill and extensional drill program at the Iron Blow VMS deposit (Figure 1). Iron Blow, along with the Mt Bonnie deposit, comprise the Hayes Creek gold-silver-zinc project in the Pine Creek region of the Northern Territory.

IBDH041 (Figure 2) was drilled below IBDH0391 and is from the infill portion of the program towards the southern end of the deposit (assay results in Table 1).

Two zones of massive sulphide mineralisation were intercepted in both IBDH039 and IBDH041, an eastern hanging wall lode, defined by its significant zinc-gold-silver mineralisation as demonstrated by the following interval in IBDH041:

33.60m@ 12.1% Zn Eq (6.28% Zn, 2.34g/t Au, 246g/t Ag, 1.45% Pb, 0.25% Cu) from 180.0m

Including a higher grade zone:

11.13m @ 32.8% Zn Eq (17.54% Zn, 6.10g/t Au, 668g/t Ag, 3.57% Pb, 0.69% Cu) from 180.9m,

and underneath, a broader western footwall lode containing massive and disseminated sulphide mineralisation:

44.56m @ 7.2% Zn Eq (4.30% Zn, 2.07g/t Au, 81g/t Ag, 0.43% Pb, 0.35% Cu) from 219.3m in IBDH041.

The remaining holes reported have identified new near surface mineralisation relating to an up dip extension to the western lode which lies outside of the existing resource model. Significant intercepts include:

2m @ 7.7% Zn Eq (6.92% Zn, 1.68g/t Au, 31.5 g/t Ag, 0.21% Pb, 0.15% Cu from 55.0m in IBRC047, and a high-grade silver/lead rich zone in IBRC052:

2m @ 19.6% Zn Eq (0.84% Zn, 1.38g/t Au, 963 g/t Ag, 3.03% Pb, 0.20% Cu) from 28.0m

1 Previously reported in ASX release 28 November 2016

PNX Managing Director James Fox said: "We are pleased to have identified a near surface extension to the western lode at Iron Blow. This is new mineralisation that extends to surface and lies outside of the existing Mineral Resource. The main massive sulphide mineralisation continues to report strong zinc, gold and silver grades. The Iron Blow Mineral Resource is to be updated in the coming months, which, along with the upgraded resource to be completed shortly at Mt Bonnie, will allow for completion of the Hayes Creek PFS by mid-2017."

Approximate surface projection of mineralisation from 2014 Mineral Resource

Figure 1: Iron Blow drill program plan view. Assays reported in this release (yellow), assays reported previously (green), previous drill holes (blue), superimposed surface projection of mineralisation from 2014 Mineral Resource, yellow hashed line X-section Figure 2

Figure 2: Cross section 115 through Iron Blow, (refer yellow hashed line in Figure 1)

Hayes Creek Pre-Feasibility

The Hayes Creek Project is located in a favourable mining jurisdiction in the Pine Creek region of Northern Territory, less than two hours by road from Darwin (Figure 3). The PFS will expand on the Scoping Study completed in March 2016, which found that mining and processing ore derived from the proposed open-pit and underground operations at Hayes Creek would generate strong financial returns for the Company. The development strategy includes the use of existing infrastructure, designed to boost economics and reduce Project risk.

Figure 3: NT Project locations

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Andrew Bennett, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Bennett has sufficient experience relevant to the style of mineralisation and the type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Bennett is a full time employee of PNX Metals Ltd and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

James Fox

Managing Director & CEO Telephone: [phone]